Africa’s luxury market is on the rise, defying economic slowdowns and proving its resilience in a sector worth over six billion dollars. Despite this, African designers capture less than ten percent of the market share, while France, Germany, or the UK luxury houses dominate the space. CNBC Africa is joined by Lyndon Barends, Managing Director of Arena Holdings, and Shirley van Wyk, Managing Director of Terre Paisible Medical Rejuvenation & Spa for this discussion.
Africa′s luxury market is on the rise, defying economic slowdowns and proving its resilience in a sector worth over six billion dollars. Despite this, African designers capture less than ten percent of the market share, while France, Germany, or the UK luxury houses dominate the space. I′m joined by Lyndon Barends, Managing Director of Arena Holdings, as well as Shirley van Wyk, Managing Director of Terre Paisible Medical Rejuvenation & Spa out in Franschhoek. Lyndon, I want to kick off with Lyndon. Lyndon has a bird′s eye view of many brand and print magazines and newspapers and channels that are having a look and seeing how we are managing brands. Lyndon, I think for me you′re the best person to give us a bird′s eye view of this luxury market. How are we treating it in South Africa, and yet what is the potential? South Africa, when it looks at the luxury market, it′s always about heritage and colonialism, and that′s where it defines itself from. When we talk about the luxury market, what are the first things we think about? We think of watches, we think of cars, we think of perfumes. Therefore, we very much engage with an old style of defining luxury, and it′s for that very reason why the African market will lag, and we don′t believe in our own market ourselves. So, until we really get to grips with how we want to define luxury and where our strengths lie, we generally won′t easily come up with a new luxury perfume. But when it comes to fabrics, we do extremely well. When we look at artworks, we can do extremely well. We can hold our own on the global market as far as that is concerned, and we have examples of luxury design ideas. So, I think we need to, as Africans, must come to grips and appreciate ourselves more, and then once we engage a lot better with the luxury market locally, you′ll find that it will explode. It explodes internationally, sometimes faster than it′s back home. So, I think to make the market sustainable and make it grow much faster, we need to engage with a lot. The kind of market that we engage in South Africa a lot would be, for example, the wine industry. Again, it has European heritage steeped in it, but we can claim it, you know, as South African. I mean, it′s a pity that you started the conversation and put the problem right on our doorstep. I mean, I was hoping that you′d put the problem on our doorstep a little bit later. So, in essence, it does not even need to be the things that we have been doing for many years. Why not come up with the next best perfume? Why are we not? So, our narrative in South Africa is our major problem. Shirley joins me on the other side, outside of our studios. Shirley, now you′ve managed to create a world-class spa, but I′m very sure that there are many to count globally, and in South Africa, few. What did it take for you to be able to build a brand that is on par with what you would find in France? And what′s your view on why that was difficult or why we don′t see it replicated enough times? In South Africa and in Africa in general, I think I agree with Lyndon. We sometimes underestimate what we′re capable of doing. And in terms of the spa industry, traditionally, the spa has been kind of an add-on to a hotel and not necessarily a focal point. So, our thinking was to actually turn the model on its head and to really showcase what we can do. So, working with designers like Tristan Duplessis, for example, we′ve created an interior space that is just phenomenal, and it does rival a lot of the international spas. And it is also just trying to find a new place for precision wellness. And I think the movement into longevity and vitality as being a luxury, and then you add on the elements which we have, which is precision wellness, it really does start changing the conversation. So, it is still something, you know, from an international perspective, I think probably will gain traction quicker because of the advances in wellness and precision medications. And I′m hoping, of course, as we grow, that the local market is going to see the potential as well. And you know what Shirley has done, and I think if you′re in the Cape area, if you look at Franschhoek and you look at Stellenbosch, I see a lot of these heritage brands there, but I also see the partnerships and the collaboration that they′re able to pull together to create these beautiful luxury products. We also have an emerging middle class. What is your message to the emerging middle class in their reinvestment in locally produced luxury brands? Because I think, based on what you were saying, that′s the only way we are going to have them rising versus them choosing to be purchasing outside, let alone investing locally. So, I think that I talk about the mindset a lot, right? So, number one, we need to appreciate that we have a lot of good things happening in the country. We are ideally suited for certain luxury industries. For example, if you look at what Shirley has done there, it′s taking nature and the environment, you know, and building something. So, the emerging market needs to rethink and place South Africa as one of the first areas of investment, obviously for local investment reasons, but also to say, hey, I′m going to play a part and a role in ensuring that our brands will get the right attention locally and also internationally. So, I think that the young investor needs to be educated, and this is where the media can play a role. And often, we also, we simply lean a lot more to these old heritage brands and the way luxury is defined, because that′s where the old money is, and that is where we need to get our income from. So, we need to balance that with saying, what are the new things? Are we giving enough attention to the Richmond Nieces and, you know, all the other new brands, whether it′s designers, the Magugus, et cetera, are we giving them enough air time? Because often these brands are made by the exposure they get in the media, and then these brands are made by what we now call influencers, before it was celebrities utilizing it and highlighting it. So, how do we play a role in the mindset? So, when, for example, in our business, we say our mission really is to inform and educate, entertain and inspire truthfully, right? So, it is incumbent on us to be able to play that role, to highlight the new kind of luxury products that exist within the country. But then again, I just want to come back to the point that there are certain areas in South Africa and in Africa that is ideally suited. So, for example, we can easily rival globally if you do something in the Kruger National Park, right? Because luxury, in terms of luxury, because the international world would love to come and experience nature and wildlife. And so, we do well in that environment. It′s old heritage stuff, but we can do that. And then if you look at fabrics, et cetera, it′s ever evolving, coming out. We do well in terms of that and design. Then when it comes to any other kind of service, like wine farms or wellness, we should be able to do well. So, I think we must also be realistic. And as any new entrepreneur or whatever, you take a look at the market and say, where am I ideally suited to do well? And how do I leverage? And Shirley, you spoke about the infrastructure you put together that is world class and the science behind what you do. That′s all quite costly. How else do you think that in South Africa we should be perhaps lifting up brands or institutions or products like yourselves? Is there enough being done to give you benefit more than just the work that you do yourself? I think, as Lyndon was saying, exposure is invaluable in allowing brands to grow and to find international success. And I think a lot more could be done in terms of financial support for brands to do that. It often takes international investment for us to be able to create something like we have done at Terrapacib. And it′s actually a massive investment potential for local financiers and investors to look to South Africa and Africa and rather invest in growing our own brands. And I think the whole idea of soft power and how luxury from South Africa and Africa in general positions us on a global stage can′t be underestimated. And this is just the beginning of a conversation. I really want to thank you for your time. I think when we have a look at the amount of work we need to do and conversations we need to have about the lifting up of global brands, there′s a lot for us to engage on just for South Africa and for the continent. I′m hoping to see you soon again.
Theme: Unlocking Africa's Luxury Potential and Redefining the Narrative
Africa's luxury market is a sector worth over six billion dollars and is on the rise, defying economic slowdowns and showcasing its resilience. Despite this, African designers only capture less than ten percent of the market share, while luxury houses from France, Germany, or the UK dominate the space. The challenge lies in redefining luxury in the African context and harnessing the continent's unique strengths to compete globally. In a recent interview on CNBC Africa, Lyndon Barends, Managing Director of Arena Holdings, and Shirley van Wyk, Managing Director of Terre Paisible Medical Rejuvenation & Spa, shared insights on the luxury market in Africa. Lyndon highlighted the importance of self-appreciation and redefining the narrative around luxury, emphasizing the need for Africans to embrace their heritage and strengths to propel the market forward. Shirley shed light on the potential for world-class luxury brands in Africa and the critical role of investments and exposure in fostering their growth. The conversation underscored the need for a mindset shift, increased support for local brands, and strategic partnerships to unlock Africa's luxury potential and position it on the global stage. The journey towards redefining luxury in Africa is ongoing, with opportunities for collaboration, innovation, and investment paving the way for a flourishing luxury market.
"The challenge lies in redefining luxury in the African context and harnessing the continent's unique strengths to compete globally."
Africa luxury market, luxury brands, African designers, global success, redefining luxury, investment, collaboration, CNBC Africa